Money, Banking and Finance 01

 

Worldwide except for a couple of renowned cities, the three captioned words are generally regarded of a certain kind, yet another kind than utility, economy, efficiency and effectiveness. First of all they are “nominal” (U∙m), as opposed to “real and substantive” (M∙U) of the latter. This fact (read: truth) is particularly opined by the Nobel laurates Paul Samuelson and William Nordhaus: “Money is useless until we get rid of it” (2010, p. 458; italics added).

             Second of all, “Money, Banking and Finance” when in Classical works would stay “stationary” under the fame of “equilibrium” in stock, balance, and peace; later days, the Keynesians call the same the “steady state” (each in T⁰). All these are opposed to all those creative powers in the keep of running, flowing, destructing, creating, “nominally destructing yet really creating,” progressing, and growing (all in T^-1).

             To some ears, wayside, the term “steady (nominally T^-1) state” sounds like propaganda for “stationary (really T⁰) state.” Honorable “intellectuals,” please be “honest.” Genuine frankly, either is only for the mechanism, your Excellency! The Solar system is “steady” while even the Bacteria are never “steady” until ex postmortem. The rest of us wouldn’t even think about a “steady economy,” or of the Steady State for that matter.

 

To begin anew, substantially owing to the mathematician Luca Pacioli from Venice, also suspected as boyfriend of Leonardo da Vinci; where there is a debit, there surely is a credit. And, GAAP is in principle only for the general public primarily because the consumer surplus is private of the particular households, in each and for all.  

             The second principle of GAAP might be that the accounting shall be monetary or otherwise financial.

 

The nature of money. Money, currency and liquidity in macroeconomics mean the legal tender (by the sovereignty) and others of comparable kind, or “derivatives” in Finance jargon. The only function of money, tender and derivatives, is mediating and balancing two values in, of and for the people of the Sovereign Commonwealth (including each of 56 BCs, of course).  

             First, the legal tender in “real” keeps the assets on the debit of households and corporations on  balance with the liabilities on the credit of the sovereignty. Second, the legal tender in “nominal” balances the credit with the debit of each and all in the public accounting. To paraphrase, money in name works merely as the unit in “financial accounting” of the general public; as opposed to working as the substantively real medium of exchange in the communal market. The name and the substance of money are of different kind, beyond juxtaposing as in Cambridge. Again, the name is the sovereign unit of account while the substance is a type of medium of exchange among “so many” others.

             Notably in commonsense, the credit, the means and the independent variable sits on the right-hand side: They when in science unanimously play the roles of a “cause.” The “effect” on the flipside, needless to say. The rest of us with “open I’s” wouldn’t vary the order, the right vs the left, for the sake of conveniently reversing the causality. Macroeconomists wouldn’t do that, either, if they were “intellectually dishonest” (adapted from NYRB 2009 against a Chicago boy just then crossed the River).

             Mediation on Earth is sheer mediation (T⁰), never creation (T^-1). “So much” likewise is meditation, imagination, dreaming, preference and the like. Who knew, at any rate: The heavenly GDP grow as many as one thousand times in so many as ten thousand moments?

             Wayside exogenous to Cambridge: If there in reality had been anything like the IS curve and the LM curve they could positively have meditated the GDP and that individually and collectively.

Hasta Manana on banking and finance! In the meantime, the rest of us have never been trained to use “so many,” “so much” and so on so forth in building a theory, general or specific.